Good morning. US stock futures dipped in Thursday morning trading as investors continued to weigh the outlook for Federal Reserve monetary policy.

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Top News

US ponders restricting cloud access to China

WHAT: The United States seems bent on putting China’s artificial intelligence dreams on pause. The Biden Administration is considering restrictions on China’s access to cloud computing over the internet as part of an attempt to limit the country’s ability to develop artificial intelligence capabilities.

WHY: The US and China are caught in an escalating technological conflict. China recently slapped controls on the export of metals critical to the chip, electric vehicle, and defense industries showing it has some power to retaliate against moves made by the US, Japan and Europe.

Fed exec says rate hikes still on the table

WHAT: Federal Reserve Bank of New York President John Williams gave a ringing endorsement of the Fed’s decision to pause rate hikes three weeks ago, but with a slight caveat — he noted that economic strength and inflation may cause the Fed to raise again in the not-so-distant future. “We still have some work to do. I’m not content with where prices are “ Williams said at an event hosted at his bank.

WHY: Fed rate actions have taken the federal funds rate target range from near zero in March 2022, to its current level of 5% and 5.25%.

OpenAI: No rogue AI on our watch!

WHAT: OpenAI, the mastermind behind ChatGPT, is on a mission to keep the AI world safe and sound. The company announced that they’re investing big bucks and assembling a crack team to make sure that artificial intelligence doesn’t go rogue. In a blog post, OpenAI said it is dedicating 20% of its compute power over the next four years to ensure AI stays on track and developments remains safe for humans.

WHY: The potential dangers of AI have been top of mind for both AI researchers and the general public. In April, a group of AI industry leaders and experts signed an open letter calling for a six-month pause in developing systems more powerful than OpenAI’s GPT-4, citing potential risks to society.

In Other News

TikTok fights back against ban

 WHAT: TikTok is pleading with a US judge to hit the brakes on a state-wide ban in Montana that’s scheduled to kick in on January 1st, 2024. In a court filing, TikTok’s Global Business Solutions President Blake Chandlee said the Montana ban “will cause significant and irreversible harm to our business and our brand” and “relationships with advertisers and business partners across the country and around the world”

WHY: TikTok, which is used by more than 150 million Americans, has faced growing calls from US lawmakers for a nationwide ban over concerns about possible Chinese government influence over it.

Canada’s government gives Meta the boot!

WHAT: Canada’s government is throwing some shade at Meta Platforms by cutting off their advertising connection with Facebook and Instagram. The move comes in response to Meta’s decision to block access to news content on their social platforms as part of a temporary test.

WHY: Canada’s move is the latest salvo in a dispute that started after Prime Minister Justin Trudeau’s administration proposed a bill that would require technology companies to pay publishers for linking to or otherwise repurposing their content online.

Nevada, Walgreens settle over opioid scandal

WHAT: Guess who’s paying up for their part in the opioid drama? Walgreens just got a hefty bill from the state of Nevada — $285 million to be exact! Walgreens settlement with Nevada brings the state’s total anticipated payments from pharmaceutical companies, retailers and others caught up in the opioid crisis to $1.1 billion.

WHY: The $285 million settlement will be paid over 15 years and will be split between the state and the signatories of the One Nevada Agreement, a coalition of Nevada county and city governments.

Key Economic Events

• Thursday - Fed’s Logan Speaks On Policy Challenges For Central Bank

• Friday - Unemployment Rate (June)

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